Blockchain 101 Episode 88 – What are the drawbacks of blockchain

There are many positive aspects of blockchain but its drawbacks are also evident. The information on a blockchain is public and transparent which prevents any private alterations.

However, this also means that once an individual’s account is known, all of his holdings and transactions are exposed, eliminating privacy. The information on a blockchain is unalterable which means that any transactional errors will be irreversible.

Blockchain is decentralized, where the ability of each individual node carrying out verifications also means that everyone would need to maintain a complete ledger. The ledgers get larger with time and a personal computer would not be sufficient for blockchain transactions storage needs.

At the same time, decentralization means that there is no central organization to safekeep a private key, which is irretrievable if lost. A decentralized network’s efficiency in reaching consensus between nodes is very low and can’t be as fast as centralized payment systems.